Gov. Pat McCrory signed a bill into law Tuesday that will shorten the leash on jobless benefits.

The legislation will decrease the amount of help the state’s unemployed workers are entitled to receive and cut back the period of time they can receive it.

Reducing that support will allow the state to begin paying back the $2.5 billion tab it has racked up with the federal government for unemployment payments since 2008. The reimbursement will also come on the backs of businesses, which will begin paying more in taxes via higher unemployment insurance.

McCrory and his supporters have argued the change will protect the unemployment safety net, repay a growing debt and build a healthy reserve fund to deal with a potential major recession in the future.

Democrats and other opponents contend it will be a crippling blow to people who are out of work and already straining to get by, since many of them have no savings. They argue people who are out of work spend unemployment benefits on necessities like mortgages, rent, food and clothing.

Where are the cuts?

Unemployed workers have long been entitled to receive a maximum of $535 per week in jobless benefits, for as many as 26 weeks. That maximum will soon drop by one-third, to $350 a week for 12 to 20 weeks. The allowed duration will depend on the state unemployment rate at the time that the person files for unemployment.

Will everyone see a cut, or just those receiving more than $350 a week?

That depends. The entire formula for calculating benefits is being tweaked.

Currently, the state decides what to pay you in unemployment based on what you made in each quarter of the year. It looks at the last five quarters you had an income, takes the high quarter, and divides it by 26.

Beginning July 1, the state will simply take the average of the last two quarters that you worked.

“Claimants after July 1 will go through that new calculation method,” said Larry Parker, spokesman for the N.C. Division of Employment Security. “Every time you file for unemployment, what you qualify for may be different depending on what your wages were in those last two quarters.”

What about people receiving unemployment now?

Most of them don’t need to worry. The new formula will largely take effect for people who file for unemployment beginning July 1.

Does that mean everyone receiving benefits now is ‘safe?’

Not exactly. Anyone on the federal unemployment extension program right now, meaning they already had their benefits prolonged, could be affected.

By approving the new law Tuesday, and changing the weekly benefit amount, the state technically violated a federal guideline.

“That means the (federal extension program) could potentially be terminated by the U.S. Department of Labor on July 1,” said Parker. “We’re awaiting guidance from them on whether that will be the case.”

You can reach Michael Barrett at 704-869-1826 or twitter.com/GazetteMike.

Numbers of note

$535 per week, for 26 weeks – The previous maximum weekly jobless benefits people could receive

$350 per week, for 12 to 20 weeks – The new maximum weekly jobless benefits people can receive, beginning July 1

$2.5 billion – What the state owes the federal government for paying jobless benefits since the Great Recession

2015 – The year the federal debt will be repaid because of the new law’s passage. That’s about three years earlier than if nothing had been done.

$2 billion – The amount that will be placed in reserve by the end of the decade to pay future jobless benefit claims

Reaction from area residents

A number of people weighed in on The Gazette’s Facebook page Tuesday about the new law affecting unemployment benefits. A few of their responses:

Christopher Barfield – “While the cuts will be hard, I think that they are necessary to stop our out-of-control spending, and a growing deficit that will ultimately mean higher taxes. We must remember it was created as a short-term emergency benefit – not to support a previous lifestyle.”

Denise L. Hullender – “All those that voted this on have obviously never been laid off and been forced to exist on unemployment until another job has been found. The rich, self-righteous make me sick!”

Jessica Bohannon – “I live off $320 a week … family of five. Pretty sad but we make it. And my husband is about to get laid off. I guess all the people that got laid off in the past and wanted to sit on their butts for years and not find work and stay on unemployment … guess we are paying for it now.”

Starr Sigmon – “There will be a lot of homeless families because of this. We have the fifth highest in unemployment in America. That should say something about our financial capability. Do not cut down our funding when the state is obviously not ready.”

Heather Harris – “When you have a family of five, you can’t really save a whole lot to get you through six months. We don't have a fancy lifestyle. We live like others. But when you have bills around what your income is, and you lose that, I’m sure the mortgage company isn’t going to say ‘Well since you’re on unemployment now, you don’t have to pay your house payment this month.”